Warning signs your SaaS company is outgrowing quickbooks: manual and inflexible billing

In the beginning stages of many companies and accounting departments, in SaaS billing out of spreadsheets is often a sufficient–though far from perfect–method of handling the business’s finances. It’s better than nothing.

But as companies scale and their billing needs accelerate and complexify, what was sufficient at one point quickly fails in the face of these new SaaS billing demands. The volume of orders, contract amendments, billing types, and revenue schedules grows as sales grow.  If this sounds anything like your RevOps or accounting department, you should be honest with yourself and other department heads if you feel the time for a finance tech stack upgrade has arrived.

3 reasons to switch to a cloud-based SaaS billing software

The benefits of a more sophisticated, cloud-based SaaS billing software include the following:

1. Automated usage tracking: Many SaaS companies would like to switch to a usage billing business model but are hesitant because accurate usage tracking seems daunting. Automation takes care of this issue altogether.
2. Better communication with board members: With the heightened reporting and data consolidation brought by automation, you’ll be able to quickly and effectively share the latest on the company with your board members. Communication is vital in explaining different billing scenario forecasts and giving your reasons for making certain pricing decisions.
3. Manage subscriptions effectively: Because of the unpredictability of churn within recurring billing companies, subscription management is an extremely useful feature of automated accounting software in anticipating and avoiding losing customers.

Because of the unpredictability of churn within recurring billing companies, subscription management is an extremely useful feature of automated accounting software in anticipating and avoiding losing customers.

Here are a few more reasons to consider making the leap to automated SaaS billing.

Automation brings SaaS billing flexibility

One of the worst aspects of spreadsheet accounting is that it keeps companies and departments perpetually stuck “in between.” Stuck in between the excitement of growth on the one hand, mixed with frustration at bottlenecks caused by manual processes on the other.

Cloud-based SaaS accounting helps companies get out of this limbo state and confidently take advantage of their momentum. After all, as you scale, you need to scale intelligently–that’s the critical part.

Automated SaaS billing helps you scale intelligently around issues of pricing in several ways:

• Always know your why: Automation enables you to run detailed multi-factor billing scenarios. Create an endless variety of “if-then” forecasts to know precisely why you’re making your billing and pricing decisions. Not only will this bring you invaluable peace of mind, but your extended team across Product, RevOps, Billing, Customer Success, Finance, and Sales will greatly appreciate this information (and your board will demand it).

• Look far into the future: Pricing and billing scenarios don’t always behave in the long term like they do in the short term. There are always elements of unpredictability you’ll have to contend with. But the further you can extrapolate into the future–and the more detail with which you can do so–the more control you’ll have over your revenue. Automation can help you plan for long-term success.

• Unlock seamless international SaaS billing: Many SaaS companies would like to build customer relationships overseas, but their spreadsheet accounting has prevented this. Cloud-based SaaS billing enables companies to bill customers in countries and currencies around the globe. Also, remember that relying on spreadsheets is costing you literal dollars and cents every day through many other missed financial opportunities.

Now let’s move on to some of the core processes and systems behind SaaS billing and how automating these can bring massive upgrades to your department.

SaaS billing processes and systems

In a nutshell, SaaS billing involves the following steps.

First, you need to acquire your users’ payment information securely. Once you have that, you use it to process the payment for the given subscription period. Then, the subscription is stored and managed throughout its lifecycle.

These steps to build your SaaS billing model are all taken care of through different mechanisms within an automated software suite:

• Payment gateway: This is an app that collects, encrypts, and safely sends payment information to a bank or some other financial organization for approval purposes.

• Merchant account: Your merchant account is the business account where you receive your recurring subscription payments once they’re successfully processed.
• Subscription management software: When you receive payment, there’s still work to be done. As the name implies, recurring billing is an ongoing arrangement. Subscription management software seamlessly and automatically handles and reports on all lifecycle stages and subscription events: upgrades and downgrades, churn, and everything else.

Sage Intacct makes modern billing for modern SaaS companies truly convenient by putting all this and more at your fingertips from one centralized location.

Key benefits of automated SaaS billing

As a SaaS CFO, you know that no one buys anything unless they’re convinced it will positively change their daily life somehow.

So let’s take a moment to look at the specific day-to-day benefits of automating your billing:

• Seamless recurring billing: Due to the ongoing nature of recurring billing, finance departments need to schedule, track, and collect funds continuously. Done manually, this becomes a real hassle and opens you up to expensive manual errors. Automated billing makes all of this a breeze and can even boost your monthly recurring revenue.

• Prevent fraud automatically: Digital payment fraud shows no signs of slowing down. Automated software can keep you and your customers safe from online fraud. This keeps your money safe but, just as importantly, safeguards your company’s reputation.

• Easily manage pricing rollouts: Changes in your pricing and billing practices carry some inherent risks. Your revenue stands to be interrupted if something goes wrong, and you risk facing a lot of irritated customers (and possibly high churn rates) too. Automation will help you gracefully manage pricing rollouts to minimize problems and maximize profits.

• Prevent involuntary churn: Cloud-based accounting software can send automatic credit card expiration warning emails to customers who are about to churn involuntarily. This keeps your recurring revenue high, and your customers will likely be grateful for the notification about their card.

These benefits of automating your SaaS billing are only the beginning of what you’ll have to look forward to once you make the switch.

Learn More

The accounting demands being placed on CFOs are increasing by the year, and spreadsheet accounting just won’t cut it beyond a certain point. An amazing story by one of the top AI firms in the Healthcare market, Paige.ai, captures this journey of transformation.

Have you reached that pivotal spot? Take a look at our product tour webinar. We produced it specifically for organizations growing beyond QuickBooks and spreadsheet accounting.